Louis Brandeis at 150: Democracy and Workers’ Rights
By Jeremy Gruber ’93
On this 150th anniversary of the birth of Louis Dembitz Brandeis, Americans have much for which to thank this giant of the 20th century. One of the greatest legal minds ever to grace both sides of the bench, first as the “people’s lawyer” and later as one of the most distinguished justices to serve on the United States Supreme Court, Brandeis had an immeasurable impact on law and social policy in his time, an influence that is still strikingly present today. Perhaps no single issue, though, was more important to Brandeis than his enduring and forceful advocacy on behalf of the rights of working men and women. His efforts in the area of industrial and labor relations helped change the nature of the employer-employee relationship in America and remains as relevant today as it was in his day.
Brandeis certainly was not destined to lead such a cause. He was born into a merchant family, and came to maturity during the height of the Industrial Age, marked by the dominating business figures of the times: Morgan, Rockefeller, Vanderbilt, Carnegie, and Guggenheim. He attended Harvard Law School and early on built a thriving law practice primarily representing employers. Yet as his peers and social contemporaries steadfastly supported the emerging laissez-faire capitalism of the times, Brandeis took notice of the increasing concentrations of power and wealth that characterized the move from an agrarian to an industrial economy. Perhaps no single event more profoundly shaped his emerging vision than the bitter Carnegie Steel strike of 1892, when Pinkerton guards hired by the company fired rifles at protesting strikers with fatal results. Thereafter, much of Brandeis’ life’s work was devoted to strengthening the rights of American workers to balance and reduce America’s growing economic inequality.
By the time of the American Industrial Age, too many had forgotten the lessons of the American Revolution -- that political independence and democracy necessitated economic self-reliance. Indeed the founding fathers had advocated American economic independence by boycotting British goods well before they advocated political independence and revolution. Brandeis recognized the need for economic independence in the larger context of a proper-functioning democracy and through that recognition grew the seeds of his then-radical economic philosophy. Brandeis wrote, “Industrial liberty must attend political liberty ... Some way must be worked out by which employer and employee, each recognizing the proper sphere of the other, will each be free to work for his own and for the common good, and that the powers of the individual employee must be developed to the utmost.” Brandeis believed it essential for a successful democracy that workers enjoy leisure, not only to rest and relax with their families, but so that they would have time to participate in the democratic process. He believed that a successful democracy necessitated not merely that workers be free from the arbitrary will of government, but that they be free from the high-handedness of industry as well; that they have a significant degree of control over their economic and working lives and futures. Brandeis was once approached by an employer who announced that he would never allow the unionization of his workforce. “We can’t run the risk of our property being destroyed,” he asserted. Brandeis replied in kind, “How can the ... men run the risk of their lives being destroyed by you?”
To this end Brandeis became a powerful advocate for trade unionism as a check on what he saw as the devastating exploitation of labor by business and its allies in government. Thus Brandeis sought to overcome the extreme adversarial relationship that had characterized labor-management relations up to that time, and ensure that both sides work together collaboratively with a mutual goal of achieving prosperity for all.
Brandeis was no revolutionary. Rather, he sought the creation of an amicable, experimental, and evolutionary process. “Don’t assume,” he warned “that the interests of employer and employee are necessarily hostile -- that what is good for one is necessarily bad for the other. The opposite is more apt to be the case. While they have different interests, they are likely to prosper or suffer together.” This spirit would forever characterize his work in labor relations. Brandeis helped Filene’s department store draft a constitution for a co-operative association between the business and its employees that gave employees a voice in every aspect of the employment relationship. Similarly, he deftly resolved one of the most contentious strikes of the time -- the New York City garment workers in 1912. Brandeis was called upon to mediate the dispute and brought with him his belief that if the workers and owners could sit down and discuss their differences candidly, a fair resolution would be achieved. He created a “Protocol of Peace” that ended the strike and that, in addition to the standard labor contract terms, created a system of mediation and arbitration that has served as a model for all such future efforts.
Brandeis thus was no enemy of business. Quite the contrary, he believed that a balance of power was necessary to curb the “excesses” of an unrestricted capitalist system and create a fair yet competitive environment. He was also extremely wary of what he called the “Curse of Bigness,” namely, the inefficiencies of the huge monopolies and their attendant financial and moral corruption that threatened not only his desired industrial democracy but small business and consumers as well. Brandeis believed America to be, “after all, not a country of dollars, but of ballots.” He advocated a policy of “scientific management” to improve upon the huge inefficiencies that characterized many large businesses of the times, the costs of which were often borne by rank-and-file workers. Indeed he feared that without a countervailing balance, unrestricted capitalism would lead to a devastating backlash by the people.
Brandeis’ support of trade unions was not without qualification. He spoke often against labor violence although he saw it as a reflection of workers’ frustration over employer indifference and callousness. For example, he supported the incorporation of unions since he feared that their lack of legal and financial accountability for their actions would breed mistakes of excess and hubris. And he favored what he called the “preferential shop” over the closed shop, a system by which an industry could consist primarily but not exclusively of union labor where the business would not be forced to surrender control over the hiring process. The “preferential shop” was a precursor of the “union shop” of today.
Also, Brandeis devised the system of Savings Bank Life Insurance for industrial workers that exists to this day in Massachusetts and other states. It was designed to provide workers with a low-cost alternative to the insurance industry’s expensive products. He did similar work with pension systems. While he would have preferred that trade unions negotiate all working conditions, he recognized that they remained at an imbalance of power with big business, and so he became a forceful advocate for corrective social legislation. He fought for regularity of employment (“the guaranteed annual wage”) and wage and hour legislation. In 1907, as an advocate in Muller v. Oregon, Brandeis persuaded a skeptical United States Supreme Court, by a 9-0 vote, to at least temporarily abandon its sacrosanct belief in the “liberty of contract” as applied to an individual’s working conditions, and uphold the constitutionality of maximum-hour laws for women. His effective introduction of a wealth of social science authority as the basis for his arguments in his first “Brandeis Brief” in Muller forever changed Constitutional litigation and became a blueprint for future advocacy of labor and other legislation and rights.
As an advisor to the Woodrow Wilson Administration (1913-1921), Brandeis helped craft the economic doctrine of President Wilson’s New Freedom doctrine. Additionally, much of the New Deal legislation of President Franklin D. Roosevelt that would begin to regulate unchecked business power originated with Brandeis’ ideas. His advocacy of government control of banking by the Federal Reserve Board prevailed over those favoring direct banker control, and his forceful advocacy aided passage of the Clayton Antitrust Act, and the creation of the Federal Trade Commission and the Securities and Exchange Commission.
In his initial years on the Supreme Court, Brandeis frequently dissented from anti-labor decisions such as those supporting injunctions against union activities and minimum wage legislation. Many of the powerful arguments that Brandeis expressed in his dissents served later as the basis for corrective legislation. Such were the Norris-La Guardia Act that restrained the issuance of injunctions against lawful strikes, and the National Labor Relations Act, which gave workers the right to organize, join unions, and bargain collectively. Brandeis’ earlier dissents in cases overturning minimum wage legislation were later cited as the foundation for the Supreme Court decision to uphold such legislation in 1941.
Louis Brandeis’ philosophy of industrial democracy and his advocacy on behalf of working men and women continue to remain highly relevant today. However, his emphasis on the necessity of achieving a balance between labor and capital is increasingly eroding. Wages and salaries currently account for the lowest share of the gross domestic product (GDP) since the government began recording such data in 1947. Wages have stagnated, social benefits are being eliminated, and health care costs continue to rise for the average American worker. Corporate profits, by contrast, are at their highest share of GDP in more than 40 years and the income gap between executive compensation and average worker wages is at its highest rate ever. Traditional indicators of economic growth are failing to account for this disparity of economic experience. The American economy is rapidly changing at the same time that the power of unions and the number of union members in the United States continues to decline at the hands of hostile government agencies and employers.
Average workers do not have a voice regarding the changing economy or a claim to a fair share of its growth, and are at the same time faced with multiplying examples of corporate excess. They are victimized by a government that has repeatedly supported corporate priorities over worker interests, and actively worked to erode legal protections under the National Labor Relations Act and other socially beneficial laws.
Thus, on this 150th anniversary of Louis Brandeis’ birth we need to remember the many contributions he made to the rights of working men and women and to achieving social justice in the United States, and hope that his vision of fairness and decency in the American workplace can be restored in the days and years ahead. And surely we must not forget his timeless words, “We can have a democratic society or we can have great concentrated wealth in the hands of a few. We cannot have both.”
Jeremy Gruber ’93 is the legal director of the National Workrights Institute in Princeton, N.J.